Tax Rebate - IO ATO 7k?

[jakc]

This is my 3rd tax return since being here.

I am on a 457, I have a TFN, earn around $80k/yr, but also get a bonus between $20-40k a year (which happens just before end of the financial yr).

- All three I have done through H&R block through the online site.

- Last year I tried using tax calculator but wanted H&R block to double check my figures.

-

 

First tax return 2008 - got around 2k back - I imagine because I only worked for 1/3 of the year.

2009 - owed around 4k back to ATO.

2010 - apparently owe 7k back to ATO.

 

Im a bit confused, so I will likely head down to HR Block for a better assesment but does anyone have any ideas why I haev to pay ATO?

 

PHI looks to be too expensive for someone on a 457 (compared to the savings made with medicare levvy)

 

Reason I ask, is I sit next to a colleague on similar pay, who is also on 457, and is getting money back from ATO.

 

I was not expecting a 7k bill this month...

Would really appreciate any advice, let me know if you need more specifics.

[Zman]

The only thing I can think of is that your employer is not deducting the right amount from your gross monthly salary. It might be worth checking that the payroll dept knows you're on a 457 visa (you get a lower tax free threshold, if I am correct). The Medicare levy surcharge should only be 1% of your taxable income (so $1000 to $1200 depending on your bonus).

 

On another note, are you claiming all you're entitled to? H&R Block are fine if you just want someone to do the basic tax return. It might be worth shelling out a few hunderd $$ to get some specific, personal tax advice.

[jakc]

Hi Zman, thanks for reply.

 

your employer is not deducting the right amount from your gross monthly salary. It might be worth checking that the payroll dept knows you're on a 457 visa

I figured this was not controlled by our Finance, but was determined by ATO via my TFN?

 

are you claiming all you're entitled to?

I work in an office 9-5 and cycle to work.

I know some people at my work spend ages collecting togetehr receipts for things like dry cleaning, the occasional day working from home - internet and aircon costs, but TBH - im assuming this may save me a few 100 bucks tops, and id ratehr have the time back for having to hassle and worry about all the paperwork.

= I dont imagine its going to account for the majority of me owing 7k to ATO.

[Zman]

Hi Jakc

 

I don't believe there's any communication between the ATO and your employer regarding the amount of tax that's withheld. The finance team probably just go by a set of tables, published by the ATO, to calculate how much tax they should send them.

 

As far as claims are concerned, it's worth looking through the tax pack to see what you can claim. Anything that is required by you to earn your salary is a potential deduction. That could include memberships of professional organisations, any additional mileage (apart from home <-> work trips), laptops/computer if used, internet is you have to wfh, income protection insurance (if you have it) etc.

 

Of course, all depends on your occupation.

[Zman]

Sorry, missed your note about cycling to work. That puts paid to any mileage claims :sad:

[jakc]

Ill see if I can get anything useful out of finance.

 

...knows you're on a 457 visa (you get a lower tax free threshold, if I am correct).

 

Any proof of this on ATO site? I cant find anything.

Would like some ammo before I head to the Finance department.

 

[Zman]

Here's the link I found --> http://www.ato.gov.au/businesses/content.aspx?doc=/content/00279717.htm

 

The pdf gives the rates for non-residents as well as residents and has a table of income versus amount that should be withheld, so you should be able to match the amount deducted from your gross to a figure in the table.

[jakc]

Spoke to my FInance department:

 

 

I’ve looked in to your query, and I believe <company> did withhold the right amount of tax from you in the year ended 30 June 2011. Tax has been withheld from you as a resident of Australia – this in accordance with the Tax File Number declaration form that you completed and we have on your employee file. As you have been living in Australia for more than 183 days and have been in Melbourne during this time, this classification appears to be correct. If you believe this is incorrect and you are a non-resident of Australia you will be taxed at different (higher) rates. To read more about the residency tests, please go to the following link on the ATO website:

http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/64131.htm&page=1&H1

 

The tax withheld from each of your pays is shown in the table below, and these amounts have been taken from the tables provided by the ATO, as attached to this email. (Locate the amount of your monthly earnings, for example $6,154, and the tax withheld is the amount in the middle column called “With tax-free threshold no leave loading”).

 

So assuming that you did not have any other income or deductions for the year ended 30 June 2011, your tax payable to the ATO would be calculated as follows:

 

Tax Payable

$4,105.04

*Individual tax rates can be viewed at: http://www.ato.gov.au/individuals/content.aspx?doc=/content/12333.htm

 

You will need to adjust this calculation to include any deductions you might have, or any other income from other sources you might receive.

 

Please note that you might also be required to pay the medicare levy surcharge of 1% in addition to the 1.5% medicare levy calculated above. This would be the case if you did not have the appropriate level of private health insurance cover and your income for MLS purposes is more than:

- $77,000 for a single person with no dependents

- $154,000 for a couple with no children or one dependent child, plus $1,500 for each additional dependent child.

 

So I would suggest the reasons that your other colleagues have lesser amounts to pay to the ATO, or even refunds, would be:

- They might have more tax deductions than what you are claiming

- They might have a different salary to you or might have received a different amount of bonus (or no bonus?)

- They might have income and deductions from other sources (eg. Investments) – as an Australian resident you are taxed your worldwide income, so they might have earnings or tax credits from another country reported in their tax return.

 

For more information on what you are entitled to claim as a tax deduction you could do some research on the ATO website or discuss it further with your tax accountant.

[Eera]

Woof! that's hefty. The only obvious thing that jumps out here to me if if they gave you the bonus and didn't tax it, or didn't declare it as non-taxable.

[heyyu]

This is my 3rd tax return since being here.

I am on a 457, I have a TFN, earn around $80k/yr, but also get a bonus between $20-40k a year (which happens just before end of the financial yr).

- All three I have done through H&R block through the online site.

- Last year I tried using tax calculator but wanted H&R block to double check my figures.

-

 

First tax return 2008 - got around 2k back - I imagine because I only worked for 1/3 of the year.

2009 - owed around 4k back to ATO.

2010 - apparently owe 7k back to ATO.

 

Im a bit confused, so I will likely head down to HR Block for a better assesment but does anyone have any ideas why I haev to pay ATO?

 

PHI looks to be too expensive for someone on a 457 (compared to the savings made with medicare levvy)

 

Reason I ask, is I sit next to a colleague on similar pay, who is also on 457, and is getting money back from ATO.

 

I was not expecting a 7k bill this month...

Would really appreciate any advice, let me know if you need more specifics.

 

get a real accountant its worth it h&r block grab people off the street and give them a quick course

[Guest GeorgeD]

Spoke to my FInance department:

 

I’ve looked in to your query, and I believe <company> did withhold the right amount of tax from you in the year ended 30 June 2011. Tax has been withheld from you as a resident of Australia – this in accordance with the Tax File Number declaration form that you completed and we have on your employee file. As you have been living in Australia for more than 183 days and have been in Melbourne during this time, this classification appears to be correct. If you believe this is incorrect and you are a non-resident of Australia you will be taxed at different (higher) rates. To read more about the residency tests, please go to the following link on the ATO website:

http://www.ato.gov.au/individuals/co....htm&page=1&H1

 

The tax withheld from each of your pays is shown in the table below, and these amounts have been taken from the tables provided by the ATO, as attached to this email. (Locate the amount of your monthly earnings, for example $6,154, and the tax withheld is the amount in the middle column called “With tax-free threshold no leave loading”).

 

So assuming that you did not have any other income or deductions for the year ended 30 June 2011, your tax payable to the ATO would be calculated as follows:

 

Tax Payable

$4,105.04

*Individual tax rates can be viewed at: http://www.ato.gov.au/individuals/co...tent/12333.htm

 

You will need to adjust this calculation to include any deductions you might have, or any other income from other sources you might receive.

 

Please note that you might also be required to pay the medicare levy surcharge of 1% in addition to the 1.5% medicare levy calculated above. This would be the case if you did not have the appropriate level of private health insurance cover and your income for MLS purposes is more than:

- $77,000 for a single person with no dependents

- $154,000 for a couple with no children or one dependent child, plus $1,500 for each additional dependent child.

 

So I would suggest the reasons that your other colleagues have lesser amounts to pay to the ATO, or even refunds, would be:

- They might have more tax deductions than what you are claiming

- They might have a different salary to you or might have received a different amount of bonus (or no bonus?)

- They might have income and deductions from other sources (eg. Investments) – as an Australian resident you are taxed your worldwide income, so they might have earnings or tax credits from another country reported in their tax return.

 

For more information on what you are entitled to claim as a tax deduction you could do some research on the ATO website or discuss it further with your tax accountant

 

I haven't done a tax return yet, but I thought I was paying too little tax as I am on a 309 (Temporary) Spouse Visa, making me a Temporary Resident for the moment. Our Finance/HR Manager pretty much gave me the same response, that I am resident for Tax purposes and have been living in Australia for more than 183 days in the tax year.

 

I think the best way forward is to employ a decent Accoutant who specialises in Migrant tax returns.

[jakc]

" best way forward is to employ a decent Accoutant who specialises in Migrant tax returns."

Thanks for the advice, but can any1 recommend me one withing Melbourne?

I assumed my circumstances where fairly simple, therefore no need for accountants (as I just work 9-5, with no expenses to claim).